Company in talks with top watchmakers to boost brand
By Bahk Eun-ji
LG Electronics plans to release a new wristwatch, tentatively named as "G Watch 2" in this year's technology trade fair in Berlin, Germany, as the company wants to become a "serious game changer" in the heated race for wearable devices.
"LG Electronics was working on a September release for the new smartwatch alongside Google's wearable platform. The IFA fair may be the venue to see the upgraded smartwatch," an official at LG told The Korea Times by telephone, last week.
He continued; "The debuts of the smartwatch will be coming at the IFA." IFA is Europe's biggest technology exhibition, which kicks off every September.
For the new smartwatch, LG Electronics is teaming up with LG Group's technology affiliates such as LG Display, LG Innotek and LG Chem. LG Chem is responsible in providing batteries.
The new LG wearable device will use OLED displays supplied by its display-making affiliate of LG Display. The G-Watch 2 will be featured with Google's voice recognition systems and allows its customers to check messages, shopping information and other customized information on a real-time basis.
Sources said the LG wristwatch will be powered by Qualcomm's application processors as LG still needs to address some issues before putting its in-house Odin-branded processors to mobile devices.
But the official said the company is yet to confirm whether or not to exhibit the new smartwatch at its open booth or just be shown for clients only.
LG Electronics declined to comment.
The LG G-Watch 2 will directly compete with the highly-anticipated Apple's "iWatch" as reports said Apple was mulling over the possibility to launch its first smartwatch from September.
The wearable device market is gaining huge momentum and is shaping up to be the next battleground in the technology industry.
Notable players such as Samsung Electronics, Motorola, Google and others have already joined the wearable device race, and more heavyweights, including Apple, are expected to follow suit.
Collaboration with top watchmakers
With the market for smartphones heading towards full saturation in major markets such as the United States and Europe while other users suffer from upgrade fatigue, major technology brands are now aiming for the wrist of new consumers and their next cash-cow.
Thanks to the impressive performance of LG's G3 flagship handset, LG Electronics is increasingly confident in effectively handling its smartwatch business, according to LG officials. LG is expected to sell more than 60 million smartphones throughout this year.
LG's smartphone business swung towards profit in the second quarter of this year _ for the first time in a year. LG Electronics sold 14.5 million smartphones during the April-June period, a quarterly high as its cash-burning marketing activities paid off.
At this year's IFA, LG Electronics plans to discuss with leading watchmakers for product collaboration as the company's top management believes a partnership with watchmakers will help it boost the products' brand recognition, image and awareness.
"LG Electronics is being approached by a lot of authoritative watchmakers for strategic collaboration. They need us and LG also wants to use their well-known brand image to boost the awareness of our smartwatches in key target markets," an official at LG Group of affiliates said, wishing to be unidentified.
The official said LG's marketing managers will discuss more of its updated smartwatch-related business strategies at sessions during the technology exhibition.
He, however, declined to name which watch companies they are negotiating with.
According to Citigroup, the global watch industry generated $60 billion in sales last year. The smartwatch industry is predicted to generate billions more in revenue for consumer technology companies this year.
While technology companies are putting more resources on growing their smartwatch businesses, some analysts and investors say smartwatches will remain a "very small part" of the tech landscape for now. Shawn DuBravac, chief economist at Consumer Electronics Association, expects that the global smartwatch market to hit 1.5 million shipments for this year with the U.S. market increasing to one million.